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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: mishedlo who wrote (67801)2/14/2001 7:43:22 PM
From: UnBelievable  Read Replies (1) of 436258
 
I Don't Think It Only Depends On Who Has The Options

The size of the variance, the steepness of the curve away from the max pain point, and the amount of shares being traded, will all figure in to the amount that it makes sense to spend on any given stock.

I would imagine that the ways in which the stocks are included in the Indices, and the max pain and option positions on the indices are also a factor.

The $SOX is a price weighted index and RMBS remains a very cost effective way to move that index. That may be why it tends to be close.

This is a case though where the fact that the information is available does not change its usefulness. Its just that the effort made on any particular stock in any particular month is going to be determined by a number of variables.

I think of the max pain point more as a magnet. Many factors are working to change the price of the stock. The max pain point will tend to attract the stock in its direction even though it may not actually close on the point.
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